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Summit Therapeutics Reports Financial Results and Operational Progress for the Second Quarter and Six Months Ended June 30, 2024

Summit Therapeutics Inc. (NASDAQ: SMMT) ("Summit," "we," or the "Company") today reports its financial results and provides an update on its operational progress for the second quarter and six months ended June 30, 2024.

Operational & Corporate Updates

Financial Highlights

Cash and Cash Equivalents, Restricted Cash, & Short-term Investments

Updated Cash Guidance

GAAP and Non-GAAP Research and Development (R&D) Expenses

GAAP Acquired In-Process Research and Development (Acquired IPR&D) Expenses

GAAP and Non-GAAP General and Administrative (G&A) Expenses

GAAP and Non-GAAP Operating Expenses

GAAP and Non-GAAP Net Loss

Use of Non-GAAP Financial Measures

This release includes measures that are not in accordance with U.S. generally accepted accounting principles (“Non-GAAP measures”). These Non-GAAP measures should be viewed in addition to, and not as a substitute for, Summit's reported GAAP results, and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Summit management uses these non-GAAP measures for internal budgeting and forecasting purposes and to evaluate Summit’s financial performance. Summit management believes the presentation of these Non-GAAP measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our U.S. GAAP results and the “Notes on our Non-GAAP Financial Information” that accompany this press release.

Second Quarter 2024 Earnings Call

Summit will host an earnings call this morning, Tuesday, August 6, 2024, at 9:00am ET. The conference call will be accessible by dialing (888) 210-3702 (toll-free domestic) or (646) 960-0191 (international) using conference code 5785899. A live webcast and instructions for joining the call are accessible through Summit’s website www.smmttx.com. An archived edition of the webcast will be available on our website after the call.

About Ivonescimab

Ivonescimab, known as SMT112 in Summit’s license territories, the United States, Canada, Europe, Japan, Latin America, including Mexico and all countries in Central America, South America, and the Caribbean, the Middle East, and Africa, and as AK112 in China and Australia, is a novel, potential first-in-class investigational bispecific antibody combining the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects associated with blocking VEGF into a single molecule. Ivonescimab displays unique cooperative binding to each of its intended targets with multifold higher affinity when in the presence of both PD-1 and VEGF.

This could differentiate ivonescimab as there is potentially higher expression (presence) of both PD-1 and VEGF in tumor tissue and the tumor microenvironment (TME) as compared to normal tissue in the body. Ivonescimab’s tetravalent structure (four binding sites) enables higher avidity (accumulated strength of multiple binding interactions) in the TME with over 18-fold increased binding affinity to PD-1 in the presence of VEGF in vitro, and over 4-times increased binding affinity to VEGF in the presence of PD-1 in vitro (Zhong, et al, SITC, 2023). This tetravalent structure, the intentional novel design of the molecule, and bringing these two targets into a single bispecific antibody with cooperative binding qualities have the potential to direct ivonescimab to the tumor tissue versus healthy tissue. The intent of this design, together with a half-life of 6 to 7 days (Zhong, et. al., SITC, 2023), is to improve upon previously established efficacy thresholds, in addition to side effects and safety profiles associated with these targets.

Ivonescimab was engineered by Akeso Inc. (HKEX Code: 9926.HK) and is currently engaged in multiple Phase III clinical trials. Over 1,800 patients have been treated with ivonescimab in clinical studies globally.

Summit has begun its clinical development of ivonescimab in non-small cell lung cancer (NSCLC), commencing enrollment in 2023 in two multi-regional Phase III clinical trials, HARMONi and HARMONi-3.

HARMONi is a Phase III clinical trial which intends to evaluate ivonescimab combined with chemotherapy compared to placebo plus chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a 3rd generation EGFR TKI (e.g., osimertinib).

HARMONi-3 is a Phase III clinical trial which is designed to evaluate ivonescimab combined with chemotherapy compared to pembrolizumab combined with chemotherapy in patients with first-line metastatic squamous NSCLC.

In addition, Akeso has recently had positive read-outs in two single-region (China), randomized Phase III clinical trials for ivonescimab in NSCLC, HARMONi-A and HARMONi-2.

HARMONi-A was a Phase III clinical trial which evaluated ivonescimab combined with chemotherapy compared to placebo plus chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with an EGFR TKI.

HARMONi-2 is a Phase III clinical trial evaluating monotherapy ivonescimab against monotherapy pembrolizumab in patients with locally advanced or metastatic NSCLC whose tumors have positive PD-L1 expression (PD-L1 TPS >1%).

Ivonescimab is an investigational therapy that is not approved by any regulatory authority in Summit’s license territories, including the United States and Europe. Ivonescimab was approved for marketing authorization in China in May 2024.

About Lung Cancer

Lung cancer is believed to impact approximately 600,000 people across the United States, United Kingdom, Spain, France, Italy, Germany, and Japan.1 NSCLC is the most prevalent type of lung cancer and represents approximately 80% to 85% of all incidences.2 Among patients with non-squamous NSCLC, approximately 15% have EGFR-sensitizing mutations in the United States and Europe.3 Patients with squamous histology represent approximately 25% to 30% of NSCLC patients.4

About Summit Therapeutics

Summit Therapeutics Inc. is a biopharmaceutical oncology company focused on the discovery, development, and commercialization of patient-, physician-, caregiver- and societal-friendly medicinal therapies intended to improve quality of life, increase potential duration of life, and resolve serious unmet medical needs.

Summit was founded in 2003 and our shares are listed on the Nasdaq Global Market (symbol "SMMT"). We are headquartered in Miami, Florida, and we have additional offices in Menlo Park, California, and Oxford, UK.

For more information, please visit https://www.smmttx.com and follow us on X @summitplc.

Summit Forward-looking Statements

Any statements in this press release about the Company’s future expectations, plans and prospects, including but not limited to, statements about the clinical and preclinical development of the Company’s product candidates, entry into and actions related to the Company’s partnership with Akeso Inc., the Company's anticipated spending and cash runway, the therapeutic potential of the Company’s product candidates, the potential commercialization of the Company’s product candidates, the timing of initiation, completion and availability of data from clinical trials, the potential submission of applications for marketing approvals, potential acquisitions, and other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "would," and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the results of our evaluation of the underlying data in connection with the development and commercialization activities for ivonescimab, the outcome of discussions with regulatory authorities, including the Food and Drug Administration, the uncertainties inherent in the initiation of future clinical trials, availability and timing of data from ongoing and future clinical trials, the results of such trials, and their success, and global public health crises, that may affect timing and status of our clinical trials and operations, whether preliminary results from a clinical trial will be predictive of the final results of that trial or whether results of early clinical trials or preclinical studies will be indicative of the results of later clinical trials, whether business development opportunities to expand the Company’s pipeline of drug candidates, including without limitation, through potential acquisitions of, and/or collaborations with, other entities occur, expectations for regulatory approvals, laws and regulations affecting government contracts and funding awards, availability of funding sufficient for the Company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements and other factors discussed in the "Risk Factors" section of filings that the Company makes with the Securities and Exchange Commission. Any change to our ongoing trials could cause delays, affect our future expenses, and add uncertainty to our commercialization efforts, as well as to affect the likelihood of the successful completion of clinical development of ivonescimab. Accordingly, readers should not place undue reliance on forward-looking statements or information. In addition, any forward-looking statements included in this press release represent the Company’s views only as of the date of this release and should not be relied upon as representing the Company’s views as of any subsequent date. The Company specifically disclaims any obligation to update any forward-looking statements included in this press release.

Summit Therapeutics Inc.

GAAP Condensed Consolidated Statements of Operations

(Unaudited)

(in millions, except per share data)

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

2024

 

2023

 

2024

 

2023

Operating expenses:

 

 

 

 

 

 

 

Research and development

$

30.8

 

 

$

9.5

 

 

$

61.7

 

 

$

19.3

 

Acquired in-process research and development

 

15.0

 

 

 

—

 

 

 

15.0

 

 

 

520.9

 

General and administrative

 

14.0

 

 

 

6.3

 

 

 

25.7

 

 

 

13.3

 

Total operating expenses

 

59.8

 

 

 

15.8

 

 

 

102.4

 

 

 

553.5

 

Other operating income, net

 

0.2

 

 

 

0.0

 

 

 

0.4

 

 

 

0.6

 

Operating loss

 

(59.6

)

 

 

(15.8

)

 

 

(102.0

)

 

 

(552.9

)

Other (expense) income, net

 

(0.8

)

 

 

1.1

 

 

 

(1.9

)

 

 

(4.1

)

Net loss

$

(60.4

)

 

$

(14.7

)

 

$

(103.9

)

 

$

(557.0

)

 

 

 

 

 

 

 

 

Net loss per share attributable to common shareholders per share, basic and diluted

$

(0.09

)

 

$

(0.02

)

 

$

(0.15

)

 

$

(1.03

)

 

Summit Therapeutics Inc.

GAAP Condensed Consolidated Balance Sheet Information

(in millions)

 

 

 

 

 

 

 

Unaudited
June 30, 2024

 

December 31, 2023

Cash and cash equivalents, restricted cash, and short-term investments

 

$

325.8

 

$

186.2

Total assets

 

$

341.9

 

$

202.9

Total liabilities

 

$

146.8

 

$

125.3

Total stockholders' equity

 

$

195.1

 

$

77.7

 

Summit Therapeutics Inc.

GAAP Condensed Consolidated Statement of Cash Flows Information

(in millions)

 

 

 

 

 

Unaudited

 

 

Six Months Ended June 30,

 

 

2024

 

2023

Net cash used in operating activities

 

$

(63.1

)

 

$

(42.4

)

Net cash used in investing activities

 

 

(180.2

)

 

 

(644.9

)

Net cash provided by financing activities

 

 

200.7

 

 

 

80.0

 

Effect of exchange rate changes on cash

 

 

—

 

 

 

0.7

 

Decrease in cash and cash equivalents

 

$

(42.6

)

 

$

(606.6

)

 

Summit Therapeutics Inc.

Schedule Reconciling Selected Non-GAAP Financial Measures

(Unaudited)

(in millions, except per share data)

 

 

 

 

 

Three Months Ended
June 30,

Six Months Ended
June 30,

 

2024

2023

2024

2023

Reconciliation of GAAP to Non-GAAP Research and Development Expense

 

 

 

 

GAAP Research and development

$

30.8

 

$

9.5

 

$

61.7

 

$

19.3

 

Stock-based compensation (Note 1)

 

(3.5

)

 

(0.7

)

 

(5.9

)

 

(1.8

)

Non-GAAP Research and development

$

27.3

 

$

8.8

 

$

55.8

 

$

17.5

 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP General and Administrative Expenses

 

 

 

 

GAAP General and administrative

$

14.0

 

$

6.3

 

$

25.7

 

$

13.3

 

Stock-based compensation (Note 1)

 

(7.6

)

 

(1.1

)

 

(14.7

)

 

(2.8

)

Non-GAAP General and administrative

$

6.4

 

$

5.2

 

$

11.0

 

$

10.5

 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP Acquired In-Process Research and Development Expenses

 

 

 

 

GAAP Acquired In-process research and development

$

15.0

 

$

—

 

$

15.0

 

$

520.9

 

Acquired In-process research and development (Note 2)

 

(15.0

)

 

—

 

 

(15.0

)

 

(520.9

)

Non-GAAP Acquired In-process research and development

$

—

 

$

—

 

$

—

 

$

—

 

 

 

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss

 

 

 

 

GAAP Net Loss

$

(60.4

)

$

(14.7

)

$

(103.9

)

$

(557.0

)

Stock-based compensation (Note 1)

 

11.1

 

 

1.9

 

 

20.6

 

 

4.6

 

Acquired In-process research and development (Note 2)

 

15.0

 

 

—

 

 

15.0

 

 

520.9

 

Non-GAAP Net Loss

$

(34.3

)

$

(12.8

)

$

(68.3

)

$

(31.5

)

 

 

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss Per Common Share

 

 

 

 

GAAP Net Loss Per Basic and Diluted Common Share

$

(0.09

)

$

(0.02

)

$

(0.15

)

$

(1.03

)

Stock-based compensation (Note 1)

 

0.02

 

 

—

 

 

0.03

 

 

0.01

 

Acquired In-process research and development (Note 2)

 

0.02

 

 

—

 

 

0.02

 

 

0.97

 

Non-GAAP Net loss Per Basic and Diluted Common Share

$

(0.05

)

$

(0.02

)

$

(0.10

)

$

(0.05

)

Basic and Diluted Common Shares

 

707.9

 

 

697.7

 

 

704.8

 

 

538.8

 

 

Summit Therapeutics Inc.

Schedule Reconciling Selected Non-GAAP Financial Measures

(in millions)

 

 

 

 

 

Unaudited

 

 

Three Months Ended

 

 

June 30,
2024

 

March 31,
2024

 

December 31,
2023

 

September 31,
2023

 

June 30,
2023

Reconciliation of GAAP to Non-GAAP Operating Expenses

 

 

 

 

 

GAAP Operating expenses

$

59.8

 

$

42.6

 

$

36.4

 

$

20.8

 

$

15.8

 

Stock-based compensation (Note 1)

 

(11.1

)

 

(9.5

)

 

(8.7

)

 

(0.7

)

 

(1.9

)

Acquired In-process research and development (Note 2)

 

(15.0

)

 

—

 

 

—

 

 

—

 

 

—

 

Non-GAAP Operating Expense

$

33.7

 

$

33.1

 

$

27.7

 

$

20.1

 

$

13.9

 

 

 

 

 

 

 

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss

 

 

 

 

 

GAAP Net Loss

$

(60.4

)

$

(43.5

)

$

(36.6

)

$

(21.3

)

$

(14.7

)

Stock-based compensation (Note 1)

 

11.1

 

 

9.5

 

 

8.7

 

 

0.7

 

 

1.9

 

Acquired In-process research and development (Note 2)

 

15.0

 

 

—

 

 

—

 

 

—

 

 

—

 

Non-GAAP Net Loss

$

(34.3

)

$

(34.0

)

$

(27.9

)

$

(20.6

)

$

(12.8

)

 

 

 

 

 

 

Summit Therapeutics Inc.
Notes on our Non-GAAP Financial Information

Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP measures should be viewed in addition to, and not as a substitute for Summit's reported GAAP results, and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Summit management uses these non-GAAP measures for internal budgeting and forecasting purposes and to evaluate Summit’s financial performance. Summit management believes the presentation of these Non-GAAP measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.

Each of non-GAAP Research and Development Expense, non-GAAP General and Administrative Expenses, non-GAAP Operating Expenses, Non-GAAP Net Loss and Non-GAAP EPS differ from GAAP in that such measures exclude the non-cash charges and costs associated with stock-based compensation. In addition, non-GAAP Acquired In-Process Research and Development Expenses, non-GAAP Operating Expenses, non-GAAP Net Loss and non-GAAP EPS each exclude certain one-time charges associated with acquired in-process research and development, in each case as described further in the notes below and as expressed in the tabular reconciliation presented above.

Note 1: Stock-based compensation is a non-cash charge and costs calculated for this expense can vary year-over-year depending on the stock price of awards on the date of grant as well as the timing of compensation award arrangements.

Note 2: Acquired in-process research and development represents a one-time charge associated with the Company's in-licensing of ivonescimab from Akeso.

Appendix: Glossary of Critical Terms Contained Herein

Affinity – Affinity is the strength of binding of a molecule, such as a protein or antibody, to another molecule, such as a ligand.

Avidity – Avidity is the accumulated strength of multiple binding interactions.

Angiogenesis – Angiogenesis is the development, formation, and maintenance of blood vessel structures. Without sufficient blood flow, tissue may experience hypoxia (insufficient oxygen) or lack of nutrition, which may cause cell death.5

Cooperative binding – Cooperative binding occurs when the number of binding sites on the molecule that can be occupied by a specific ligand (e.g., protein) is impacted by the ligand’s concentration. For example, this can be due to an affinity for the ligand that depends on the amount of ligand bound or the binding strength of the molecule to one ligand based on the concentration of another ligand, increasing the chance of another ligand binding to the compound.6

Immunotherapy – Immunotherapy is a type of treatment, including cancer treatments, that help a person’s immune system fight cancer. Examples include anti-PD-1 therapies.7

Intracranial - Within the cranium or skull.

PD-1 – Programmed cell Death protein 1 is a protein on the surface of T cells and other cells. PD-1 plays a key role in reducing the regulation of ineffective or harmful immune responses and maintaining immune tolerance. However, with respect to cancer tumor cells, PD-1 can act as a stopping mechanism (a brake or checkpoint) by binding to PD-L1 ligands that exist on tumor cells and preventing the T cells from targeting cancerous tumor cells.8

PD-L1 – Programmed cell Death Ligand 1 is expressed by cancerous tumor cells as an adaptive immune mechanism to escape anti-tumor responses, thus believed to suppress the immune system’s response to the presence of cancer cells.9

PD-L1 TPS – PD-L1 Tumor Proportion Score represents the percentage of tumor cells that express PD-L1 proteins.

PFS – Progression-Free Survival.

RANO – Response Assessment in Neuro-Oncology, the standard for assessing the response of a brain or spinal cord tumor to therapy.

SQ-NSCLC – Non-small cell lung cancer tumors of squamous histology.

T Cells – T cells are a type of white blood cell that is a component of the immune system that, in general, fights against infection and harmful cells like tumor cells.10

Tetravalent – A tetravalent molecule has four binding sites or regions.

Tumor Microenvironment – The tumor microenvironment is the ecosystem that surrounds a tumor inside the body. It includes immune cells, the extracellular matrix, blood vessels and other cells, like fibroblasts. A tumor and its microenvironment constantly interact and influence each other, either positively or negatively.11

VEGF – Vascular Endothelial Growth Factor is a signaling protein that promotes angiogenesis.12

____________________

1

American Cancer Society: www.cancer.org/cancer/types/lung-cancer/about/key-statistics.html. Accessed April 2024; World Health Organization: International Agency for Research on Cancer, Globocan data by country (UK, Spain, France, Italy, Germany); Japan National Cancer Registry.

2

Schabath MB, Cote ML. Cancer Progress and Priorities: Lung Cancer. Cancer Epidemiology, Biomarkers & Prevention. (2019).

3

About EGFR-Positive Lung Cancer | Navigating EGFR (lungevity.org).

4

Schabath MB, Cote ML. Cancer Progress and Priorities: Lung Cancer. Cancer Epidemiology, Biomarkers & Prevention. (2019).

5

Shibuya M. Vascular Endothelial Growth Factor (VEGF) and Its Receptor (VEGFR) Signaling in Angiogenesis: A Crucial Target for Anti- and Pro-Angiogenic Therapies. Genes Cancer. 2011 Dec;2(12):1097-105

6

Stefan MI, Le Novère N. Cooperative binding. PLoS Comput Biol. 2013;9(6)

7

US National Cancer Institute, a part of the National Institute of Health (NIH). https://www.cancer.gov/about-cancer/treatment/types/immunotherapy. Accessed April 2024.

8

Han Y, et al. PD-1/PD-L1 Pathway: Current Researches in Cancer. Am J Cancer Res. 2020 Mar 1;10(3):727-742.

9

Han Y, et al. PD-1/PD-L1 Pathway: Current Researches in Cancer. Am J Cancer Res. 2020 Mar 1;10(3):727-742.

10

Cleveland Clinic. https://my.clevelandclinic.org/health/body/24630-t-cells. Accessed April 2024.

11

MD Anderson Cancer Center. https://www.mdanderson.org/cancerwise/what-is-the-tumor-microenvironment-3-things-to-know.h00-159460056.html. Accessed April 2024.

12

Shibuya M. Vascular Endothelial Growth Factor (VEGF) and Its Receptor (VEGFR) Signaling in Angiogenesis: A Crucial Target for Anti- and Pro-Angiogenic Therapies. Genes Cancer. 2011 Dec;2(12):1097-105.

 

Contact Summit Investor Relations:
Dave Gancarz
Chief Business & Strategy Officer

Nathan LiaBraaten
Senior Director, Investor Relations

investors@smmttx.com